2010 Strategic Direction and Priorities
NAL’s strategic focus for 2010 will build on the Trust’s positive performance in 2009. The Trust plans to maintain its leadership position in the Cardium oil resource play in central Alberta, continue ongoing activity in the attractive Mississippian oil portfolio in SE Saskatchewan and invest in strategic gas opportunities on the Trust’s expanded land portfolio. The Trust also plans to divest of approximately 500 boe/d of non-strategic assets designed to high grade its asset base.
NAL has structured its 2010 plans targeting a total payout ratio (distributions + capital expenditures) of 110% - 115% which balances an extensive inventory of light oil opportunities, maintaining distributions, and prudently managing the balance sheet. Consistent with 2009, NAL’s balance sheet strength and access to capital markets positions the Trust to take advantage of value adding acquisition opportunities in the future. Subject to final bank documentation being completed, the Trust’s credit facility is expected to be increased to $550 million from $450 million as a result of the Breaker Energy transaction closing, which occurred on December 11, 2009.
The Trust currently has $535 million of safe harbour available for transactions before the end of 2010. Safe harbour restrictions were imposed as part of the Tax Fairness Plan announced on October 31, 2006.
NAL management continues to assess alternatives for corporate conversion and reiterates that the company plans to maintain a yield oriented business model post conversion. The timing of conversion is expected to occur in late 2010 or early 2011 in order to maximize the tax shield currently provided for in the trust model and protect its $1.2 billion of available tax pools.
NAL has based its 2010 plans on a US$77 WTI per barrel crude oil price a 1.05 Cdn/US$ exchange rate and Cdn$5.00 per GJ AECO natural gas price.
Our 2010 Guidance is summarized as follows:
2010 Full Year Guidance | |
| Average total Production (boe/d) | 29,500-30,500 |
| Capital expenditures ($MM)* | 175 |
| Wells drilled (gross/net) | 137/67 |
| Operating costs ($/boe) | 11.00-11.50 |
*Excluding property and corporate acquisitions & before AB drilling credits of $10MM
Forward Looking Information
Please refer to the disclaimer on forward-looking information set forth under the Management's Discussion and Analysis of our 2010 guidance press release. The disclaimer is applicable to all forward-looking information.
To download a pdf version of our 2010 guidance press release, click here.
